KRS 154.27-020: Short title -- Legislative findings -- Purpose of subchapter --

Incentives. (Effective July 1, 2021)

(1) This subchapter shall be known as the "Incentives for Energy-related Business

Act."

(2) The General Assembly hereby finds and declares that it is in the best interest

of the Commonwealth to induce the location of innovative energy-related

businesses in the Commonwealth in order to advance the public purposes of

achieving energy independence, creating new and advanced technologies,

creating new jobs and new investment, and creating new sources of tax

revenues that but for the inducements to be offered by the authority to

approved companies would not exist.

(3) The purpose of this subchapter is to assist the Commonwealth in moving to the

forefront of national efforts to achieve energy independence by reducing the

Commonwealth's reliance on imported energy resources, and to become a

national leader in emerging industries which use substantial amounts of

energy. The provisions of this subchapter seek to accomplish this purpose by

providing incentives for companies that, in a carbon capture ready manner,

construct, retrofit, or upgrade facilities for the purpose of:

(a) Increasing the production and sale of alternative transportation fuels;

(b) Increasing the production and sale of synthetic natural gas, chemicals,

chemical feedstocks, or liquid fuels, from coal, biomass resources, or

waste coal through a gasification process;

(c) Increasing the production and sale of energy-efficient alternative fuels;

(d) Generating electricity for sale through alternative methods such as solar

power, wind power, biomass resources, landfill methane gas,

hydropower, or other similar renewable resources; or

(e) Increasing the usage of electricity in areas which have an abundant

supply due to the loss of manufacturing businesses across the state.

(4) To qualify for the incentives provided in this subchapter, the following

requirements shall be met:

(a) For an alternative fuel facility or gasification facility that uses oil shale, tar

sands, or coal as the primary feedstock, the minimum capital investment

shall be one hundred million dollars ($100,000,000);

(b) For an alternative fuel facility or gasification facility that uses biomass

resources as the primary feedstock, the minimum capital investment shall

be twenty-five million dollars ($25,000,000);

(c) For an energy-efficient alternative fuel facility, the minimum capital

investment shall be twenty-five million dollars ($25,000,000);

(d) For an alternative fuel facility located in Kentucky that is newly

constructed on or after August 1, 2010, or an existing facility located in

Kentucky that is retrofitted or upgraded on or after August 1, 2010, and

that, after the new construction, retrofit, or upgrade, primarily produces for

sale alternative transportation fuels using natural gas or natural gas

liquids as the primary feedstock, the minimum capital investment shall be

one million dollars ($1,000,000); provided that the authority may approve

a maximum of five (5) projects that meet the requirements of this

paragraph;

(e) For a renewable energy facility, the minimum capital investment shall be

one million dollars ($1,000,000);

(f) For a carbon dioxide transmission pipeline, the minimum capital

investment shall be fifty million dollars ($50,000,000); and

(g) For a cryptocurrency facility, the minimum capital investment shall be one

million dollars ($1,000,000).

(5) The incentives under the Incentives for Energy-related Business Act are as

follows:

(a) An advance disbursement of post-construction incentives for which an

approved company has been approved, the maximum amount of which is

based upon the estimated labor component of the total capital investment

of the eligible project, and the utilization of Kentucky residents during the

construction period as set forth in KRS 154.27-090;

(b) Sales and use tax incentives of up to one hundred percent (100%) of the

taxes paid on purchases of tangible personal property made to construct,

retrofit, or upgrade an eligible project, including commercial

cryptocurrency mining equipment at a facility, as set forth in KRS 139.517

and 154.27-070;

(c) Up to eighty percent (80%) of the severance taxes paid on the purchase

or severance of:

1. Coal that is subject to the tax imposed under KRS 143.020 and that

is specifically used by an alternative fuel facility, energy-efficient

alternative fuel facility, or a gasification facility as feedstock for an

eligible project, as set forth in KRS 143.024 and 154.27-060; or

2. Natural gas or natural gas liquids that are subject to the tax imposed

under KRS 143A.020 and that are specifically used in an alternative

fuel facility described in subsection (4)(d) of this section as

feedstock for an eligible project, as set forth in KRS 143A.025 and

154.27-060;

(d) Up to one hundred percent (100%) of the Kentucky income tax imposed

under KRS 141.040 or 141.020, and the limited liability entity tax imposed

under KRS 141.0401 on the income, Kentucky gross profits, or Kentucky

gross receipts of the approved company generated by or arising from the

eligible project, as set forth in KRS 141.421 and 154.27-080; and

(e) Authorization for the approved company to impose a wage assessment of

up to four percent (4%) of the gross wages of each employee subject to

the Kentucky income tax:

1. Whose job was created as a result of the eligible project;

2. Who is employed by the approved company to work at the facility;

and

3. Who is on the payroll of the approved company or an affiliate of the

approved company;

as set forth in KRS 154.27-080.

(6) The maximum recovery from all incentives approved under this subchapter for

an eligible project shall not exceed fifty percent (50%) of the capital investment

in the eligible project.

(7) The incentives available to an approved company shall be negotiated with and

approved by the authority.

(8) If a newly constructed facility that qualifies for incentives under this subchapter

is later upgraded or retrofitted in a manner that would qualify for incentives

under this subchapter, the retrofit or upgrade shall be a separate eligible

project, and the minimum investment requirements and carbon capture

readiness requirements, if required, shall be met for the retrofit or upgrade to

qualify for incentives under this subchapter.

(9) The General Assembly finds that the authorities granted by this subchapter are

proper governmental and public purposes for which public moneys may be

expended.